SEC Adopts New Rules Concerning Compensation Committees and Compensation Advisors

Summary: The Securities and Exchange Commission has adopted new Exchange Act Rule 10C-1, as required under Section 952 of Dodd-Frank, directing stock exchanges to adopt listing standards for compensation committees and compensation advisors. The SEC also adopted an amendment to existing proxy disclosure rules requiring an issuer to disclose whether the work of any compensation advisor raised conflicts of interest and, if so, the nature of those conflicts and how they were addressed.

Given that the new rules likely will be in place for the 2013 proxy season, this client alert explores changes that boards of directors should begin thinking about pending final adoption of the rules.